Yet another question about taxes

[stripes]

Got some more nastygrams from the ex today. Most of them were the usual insult and sarcasm, and got filed and ignored. One of them threatened legal action over a number of things. Most of them were pretty clearly pointless, but one of them I'm not sure about. he has brought it up before, but this is the first time he's explicitly threatened to take it to court. It's about the Amount for Eligible Dependent for 2013.

Background:

Our divorce order says that we will alternate claiming this amount - me in even-numbered years and him in odd. It also states that if one parent is ineligible to claim it, the amount can be claimed by the other. (We have a statement filed with CRA saying that we alternate claiming the amount, which has been accepted).

Ex has remarried. This makes him ineligible to claim the AED in 2013, which would otherwise be "his" year. He wants me to pay him the amount that he calculates the AED would be worth to me if I claim it at the end of 2013 (on the assumption that he already knows what my income will be for 2013, and that he knows I will remain unmarried and thus eligible). He also wants this amount to be paid in monthly installments in advance, retroactive to January.

His argument is that this is necessary in order to equalize resources in the households. (Our incomes are in 53%/47% ratio, and he has his new wife as a second income earner, so his household income is much higher than mine. This is not something I would make an issue of, because his new wife doesn't create any financial hardship for me). He claims this is a standard procedure recommended by FLIC.

My response is that our order spells out what happens in a situation where one parent is ineligible to claim this deduction, which is that the other parent can claim it if they choose. End of story.

(Reading through CanLII, I also found a number of cases concerning tax benefits in which the judge ruled that since the financial impact of certain deductions and credits can't be determined until the end of the tax year, so messing around with these credits in anticipation of what they will be worth at the end of the year is a bad idea).

Does anyone know if he has a legal leg to stand on, if this is a common practice, or if this is just more flailing around?

[Rioe]

Definitely flailing. He just seems to like to hassle you, and throw stuff at you in the hopes that something will stick and you'll give him money. I can't imagine FLIC is recommending this to him either. If he wanted to keep alternating the AED, he shouldn't have remarried.

There is no requirement to equalize the resources of the households. Your incomes are already unusually close for a divorced couple, so there should hardly be any money changing hands (unless custody is over 60%). Your order spells out what you do with the AED. Claim it every year from now on, and keep the refund. Your agreement does not indicate that you share it with him, and I've never heard of one that does.

I don't know that I'd even respond to his demand. That just invites further arguments. It's too ridiculous to negotiate about, and not related to child issues, so add it to the crap pile and ignore it.

I wonder if your ex knows Cashcow's ex?

[blinkandimgone]

Does anyone know if he has a legal leg to stand on, if this is a common practice, or if this is just more flailing around?

Tax law is seperate from family law. You could write whatever you want in your SA, however, tax law is tax law and your agreement does not over-ride that. He isn't eligible, end of story.

Can you claim the amount for an eligible dependant?

If he has an issue with not being entiteled to it, he should take it up with CRA and see if they agree. And if it was THAT important to him, he should have taken it into consideration before deciding to get married.

[stripes]

Thanks Rioe. I appreciate the assistance in sorting out the things I need to think seriously about from the pure nonsense. A year ago, I would have been losing sleep worrying about the threats and all the items on his wish list, so this is progress.

I respond with the standard "this issue is addressed in para xxx of the divorce order. It is not open for discussion".

Is Cashcow's ex the one with the endless weird S7 demands? In this most recent nastygram, my ex also wanted S7 reimbursement for (among other things) a Halloween costume, a bathing suit from last summer, and three haircuts at the local MagiCuts. In his own words "If I have to pay for her to get her hair cut three times in one year, there's a big problem". I couldn't make this stuff up.

[Rioe]

Yep, that's her. Maybe she's your ex's new honey and giving him ideas!

[HappyMomma]

My ex wanted me to pay him for watching our children for an hour afterschool on my weeks. Hilarious.

These ex's who are obsessed with money will make any excuse to try to squeeze another penny out of you. It really makes me shake my ehad.

[stripes]

CSAngel, I feel your pain. Mine wanted to charge me $38 per night to have D7 stay with him for an "extra" night when I was on a business trip. He computed this as 1/30 of the monthly table amount for my guideline income (never mind that we have 50/50 offset CS, and he earns over $100K per year). He said it was necessary "to compensate for the increased costs of entertaining and feeding D7 in my home". This came up eight months after the business trip in question, after turning down my offer to trade nights so I would have D7 for extra nights in compensation. Needless to say, this particular financial demand went into the "file and ignore" pile.

[HappyMomma]

CSAngel, I feel your pain. Mine wanted to charge me $38 per night to have D7 stay with him for an "extra" night when I was on a business trip. He computed this as 1/30 of the monthly table amount for my guideline income (never mind that we have 50/50 offset CS, and he earns over $100K per year). He said it was necessary "to compensate for the increased costs of entertaining and feeding D7 in my home". This came up eight months after the business trip in question, after turning down my offer to trade nights so I would have D7 for extra nights in compensation. Needless to say, this particular financial demand went into the "file and ignore" pile.

LOL! Too funny. I do believe I read in the guidelines somewhere that you can't be compensated for looking after your own child. I'll have to take another look and see if I can find it....

[stripes]

CSAngel, if you do run across that in the guidelines, that would be helpful, in case this one comes back.

[HappyMomma]

Damnit. I know I read this somewhere but I can't find it. I need to bookmark more often.

[stripes]

So I did some quick googling and found a clear statement from CRA that you can't claim child care expenses for tax purposes when payment is made to the child's parent:

http://www.cra-arc.gc.ca/E/pbg/tf/t778/t778-lp-12e.pdf, p4.

That doesn't directly address claims made under S7 by a parent who wants to be compensated for looking after his or her own child, but the definition of "extraordinary expense" suggests that looking after your own child for an hour or a night is not "extraordinary":

FCSG Section 7 (1.1) (a): extraordinary expenses are "expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table".

It would be hard to argue that babysitting your own child is "extraordinary" by this standard, unless you're incredibly hard up for money and/or support is not being paid.

I really should get back to work.